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2021 (10) TMI 828 - AT - Income TaxEstimation of income - bogus Purchases - CIT-A sustaining addition @12% of the alleged non-genuine purchases - HELD THAT:- As there should be an estimation of profit element from these purchases and should be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them. Average Gross Profit ratio to sales of the assessee for the last three preceding Assessment Years i.e. A.Y. 2006-07 to A.Y. 2008-09 it is arrived at 9.19% and the Gross Profit margin of the assessee for the current assessment year i.e. A.Y. 2009-10 is 9.17%. In view the nature of business of the assessee i.e. trader in manufacturer and dealer in watches, and the Gross Profit ratio to sales for the last three preceding assessment years and also current assessment year it would be justified if the profit element embedded in those purchases are estimated at 9.5% Thus we restrict the disallowance of purchases to 9.5% and compute the income accordingly - Appeal of the assessee is partly allowed.
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